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(1:20) (b) Supply & Demand determine Pm and MR (as horizontal line on Pm). Draw MC. Find profit maximizing point. And then, make sure ATC sits below it, as the firm is making profit. (2:54) (c) In the long run, perfectly competitive firms make zero economic profit. In regards to this market, adjust supply & demand to bring Pm down. This results in MR also dropping to the point at which MR, MC, & ATC all intersect… aka zero economic profit. (4:05) (d) Complete pivot to externalities here. Positive externality since unintended benefits, not costs, are falling on third parties. This means the allocatively efficient quantity is higher than the.
Current market quantity, and the gov’t boosting output would increase total surplus. Need help understanding the core concepts at play here? Go to my site and learn everything in ~2 hours. I have 60sec concept breakdowns for all Microeconomics concepts. Comment below any other problems that you’d like me to run through like this!”. As noted by @captainmjack: “Resource Allocation & Economic Systems | Micro Topic 1.2 | 10-Minute Econ”. Creator @econ.w.case: “AP Micro Econ Elasticity Question ANSWERED! Full video on types of goods: https://youtu.be/tDM7iFDncUY”. According to user @econ.w.case: “Comment your answer to these ap micro exam questions below!”. Creator @academic_assassin0: “Monopoly Graph, Allocative Efficiency, Resource/Labor Market, Least-Cost Rule”. According.
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